10.12         ndian   onom
     shipbuilding industry has the capacity and             services can result in large dividends in the form
     expertise but is functioning below capacity. Some      of higher services growth and services exports,
     of the suggested steps to boost the sector are:        which in turn can help in pulling up the economy
           (i) need to replace our ageing ships with new    to higher growth levels. The future actions in the
               ones,                                        sector can be outlined as given below11:
          (ii) increasing shipping fleet (with prices             (i) India’s services sector, which showed
               falling on account of global slowdown),                 resilient growth after the recovery of the
         (iii) a special financing mechanism needs to                  global economy following the global
               be developed.                                           financial crisis, has been showing subdued
         (iv) utilising India’s shipbuilding and repairs               performance in recent times. Despite the
               yards and enhancing their capacity (as                  slowdown, the prospects continue to be
               India needs to replace many old ships                   bright for many segments of the sector.
               and growing ship repairs business in the         (ii) In future, government’s focus on the
               world).                                                 following are expected to provide impetus
                                                                       to logistics services—
     Railways: The FDI policy of Railways sector
     restricts FDI in rail transport, except in mass                   (a) infrastructure development,
     rapid transit systems. FDI and privatisation in the               (b) favourable regulatory policies like
     railways could be the next big ticket reforms. A                       liberalisation of FDI norms,
     proposal has been initiated by Indian Railways,                   (c) increasing number of multimodal
     for making suitable changes in the existing FDI                        logistics service providers,
     policy in order to allow FDI in railways, to foster               (d) growing trend of outsourcing logistics
     creation of world class rail infrastructure. The                       to third party service providers, and
     proposal envisages—                                               (e) entry of global players.
           (i) allowing FDI in all areas of the rail sector
                                                               (iii) Though shipping services are at a low key
               except railway operations.
                                                                       at present, with increased imports of POL
          (ii) even in railway operations, FDI is                      (petroleum, oil and lubricants) for stocks
               proposed in PPP projects, for suburban                  build up to take advantage of low crude
               corridors, high speed train systems, and                oil prices, containerisation of export and
               dedicated freight lines.                                import cargo and modernisation of ports
           While privatisation of railways has been                    with private sector participation, recovery
     successful in some countries like Japan, it has                   of the shipping and port services sector
     failed in some others like the UK. So this proposal               can be expected.
     needs to be examined carefully and quickly to             (iv) The prospects for Indian aviation services
     allow privatisation and inflows of FDI in areas                   have improved following—
     where it is feasible.
                                                                       (a) the fall in prices of aviation fuel,
                                                                            which accounts for nearly 40 per cent
        outlInInG future                                                    of the operating expenses of airlines
     With plenty of opportunities, the services sector                      in India;
     is like an uncharted sea. As yet, its potential has
                                                              11.    Ministry of Finance, Economic Survey 2015–16,
     not been tapped fully by India. A targeted policy               Economic Survery 2016-17 and Economic Survey
     of removing bottlenecks in major and potential                  2017-18.